My Lords, I join others who have participated in the debate in thanking the noble Baroness, Lady Parminter, for giving us this opportunity. A sustainable green economy can be achieved only with a well-focused programme of funding for new technologies. We will not achieve net-zero carbon emissions without innovation. All political parties recognise this; it is not controversial but a matter of cross-party agreement.
The noble Baroness, Lady Jones, will not be surprised to hear that I see yesterday’s Budget in a rather different light. I welcome the increases in publicly funded research and development, with funding now going to total £22 billion a year—that is a 15% increase next year. This huge investment over a short period has been widely welcomed by the science community. Welcoming this public funding increase, the Royal Society president is reported as saying:
“We must also continue to build on our great strengths in the basic research that feeds the innovation of the future”.
This touches on the underlying national problem. Of course, we have always said we need more money and compared ourselves with other OECD countries. Yesterday’s Budget addresses that issue. We rightly congratulate ourselves on the quality of our basic research, yet we consistently fail to exploit this to the point where we deliver the new technologies, whether to promote the green economy or anything else.
The Budget yesterday reminded us that John Logie Baird invented the television, yet most of our televisions are now made by foreign-owned companies. Where we go wrong is that our world-class scientists and engineers in universities and research institutes are not close enough to the small and medium-sized businesses that represent a significant proportion of our entrepreneurial potential. Even our large manufacturing businesses, with a few exceptions, do not have the close links with basic and strategic research that you find in countries such as Germany.
A comparison of Germany’s green economy with the United Kingdom’s is instructive. Our outstanding record of scientific findings of international significance is way ahead of Germany’s, yet when it comes to transferring the science and engineering to new businesses and jobs, the Germans have a greatly superior record. Perhaps the most significant difference between the two countries is the level of commercial, as opposed to public, research funding. German manufacturing companies not only spend more on funding their own research but have much closer linkages with academic, publicly funded researchers. It is common to find researchers in Germany who move seamlessly between publicly and privately funded research.
To be more specific about how to promote the United Kingdom green economy, we need a road map —something mentioned by the noble Lord, Lord Browne. How will we deliver enough low-carbon electricity by 2050? The target the United Kingdom Government have set of zero carbon by 2050 is clearly ambitious, yet some countries have set even more aggressive targets. It can be achieved but, as I say, we will need new technology and a much clearer vision of how we are to meet the increased demand for electrification and low-carbon heating.
While we initially made good progress in increasing our renewable energy capacity, in recent years progress has stalled—partly due to the lack of support for onshore wind power. Last year only one onshore wind farm was completed, and solar development has slowed down. We will need more onshore and offshore wind and solar projects, whatever local opposition there might be to each planning application.
Because of the intermittent nature of much renewable energy, we must balance the energy portfolio with adequate nuclear capacity, which of course is also low carbon but provides a reliable baseload. At present, nuclear provides 21% of our electricity requirements from eight operating nuclear sites. Some of this capacity will be due for decommissioning, and we are projected to lose around 9 gigawatts of nuclear capacity by 2035. We have heard that the expensive nuclear installation under construction at Hinkley Point could provide 7% of our electricity requirements. There is then the possibility of Sizewell C in Suffolk providing a further 7%, hopefully at a lower price.
The present contribution of energy generated by wind, solar and hydro is 23%, and nuclear is 21%, so in favourable conditions, we can generate some 40% of present requirements from low carbon, but we must extrapolate. As transport becomes ever more dependent on electricity, this demand will increase, and as it is not unusual for renewable power to fall to a fifth of its maximum capacity, there must be surplus renewable capacity, and at least 30% of estimated demand by 2050 must be provided by nuclear capacity or some other baseload. I agree that we need to develop carbon capture and storage. I do not take the pessimistic line of the noble Baroness, Lady Sheehan. It was unfortunate that the initiative promoted by my noble friend Lord Marland lost momentum, but I was delighted to see carbon capture and storage mentioned in the Budget. We must develop hydrogen as an economic source of fuel, particularly for transport.
I was most interested to hear the proposals from my noble friend Lord Howell. We must look carefully at reduced-cost nuclear capacity via the development of small modular nuclear reactors, which could have cost and land-use requirement advantages over solar and wind farms. Rolls-Royce and other companies hope to provide small nuclear power stations that will generate up to 40 megawatts each and take about four years to build. That is a reasonably sensible proposition to look at more carefully.
Lastly, as the title of today’s debate refers to resource efficiency, may I make a plea that, when looking at waste treatment, the technology of incineration—which, like onshore wind, generates a lot of opposition from local interests—be given further consideration? After all, it ultimately recycles everything.